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Governor Wants 'Wholesale Revisions' to Road Funding Formula

July 5, 2016

Michigan Governor Rick Snyder returned Senate Bill 557 unsigned and is calling for unspecified "wholesale revisions" of how Michigan divides up road construction money. He vetoed legislation that would have ended a requirement that 45 cities cover some of the cost of state road projects within their limits.

SB Bill 557 was brought forward by cities concerned over having to pay up to 2.5 percent of the massive reconstruction and widening of Interstate 75 in Oakland County, north of Detroit. The bill, if signed, would have ended local cost-sharing requirements on state trunkline road projects.

Cities in Michigan with at least 25,000 residents are required to pay a share of state trunkline projects that run through their borders under current law. Some municipalities have argued that the requirement as it relates to the I-75 project is unfair, since smaller municipalities don't have to contribute, and will leave them with less money for local road projects. Troy, for instance, has estimated that the I-75 work will cost the city $9.6 million over eight years, according to a Senate Fiscal Agency analysis.

Snyder vetoed the measure Friday despite it winning unanimous approval from the GOP-led Legislature, warning that forcing the Michigan Department of Transportation to fully fund certain state highway projects would result in $22 million less for other projects at a time that "aggressive" spending is needed to upgrade Michigan's poor roads.

In his veto letter, Snyder said the bill would have created a "funding gap" that ultimately would have led to MDOT diverting money from rural projects to urban trunklines.